Verizon Sells Off Rural Lines

ffejie writes "Verizon has announced that it will be spinning off rural assets to FairPoint Communications. These include all assets in the states of Maine, New Hampshire, and Vermont. The deal will close sometime in 2007 and is worth $2.7 billion. 1.6 million phone lines, 234,000 DSL subscribers, and 600,000 long-distance customers will be moved to FairPoint in Verizon's effort to shed its low-margin lines in rural areas. The sale has been rumored since the summer at least. With Verizon aggressively rolling out high-speed FiOS (FTTP) in its service area, what will happen to the consumers stuck with a smaller telco like those moving to FairPoint?"

What happens?

[AKAImBatman]

With Verizon aggressively rolling out high-speed FiOS (FTTP) in its service area, what will happen to the consumers stuck with a smaller telco like those moving to FairPoint?"

They get better service?

Big telcos like Verizon tend to focus on large population areas first, because that's where the money is. Which means that the major cities get more options and better service while Bob Newhart over in Middlebury, Vermont can forget about ever getting Fiber service. In fact, I'd guess that the sale of the rural lines in these areas are being done specifically so that Verizon doesn't have to deploy FiOS [wikipedia.org] as promised.

In comparison, a small company like Fairpoint is going to have to focus on the customers they've got. Which means either making them happy, or losing the business to local Co-Ops setup to provide the missing services.

Re:Co-ops

[Crazy Man on Fire]

Vermont already has CoOps and municipal internet. Burlington Telecom [burlingtontelecom.net] provides FTTP over which they serve voice, television, and data.

Why is this assumed to be bad???

[WidescreenFreak]

If anything, this could make it that much better. Verizon ignored those area because they have a much higer density (therefore more potential customers per mile) in urban/suburban areas. Now with those people under a more local telecom, the company doesn't have to focus on anything but those local customers. And it's not like there's no competition. Satellite broadband is there, even though it's probably expensive, and who knows what kind of wireless broadband might be available. (I don't live up there so I don't know.) So, the new company should be far more aware of customer service than Verizon ever will be.

It's rather presumptuous to assume that the customers will be let out to dry just because the big, bad Verizon is leaving.

Re:What happens?

[qbwiz]

As a counterpoint, the central office that we get phone service from is operated by D&E. Most of the ones surrounding us are operated by Verizon. We pay $45 a month for 512Kbps down, 256 kbps up DSL, while you can get 768 Kbps down DSL from Verizon for $20/month. I suspect that it'll be quite a while until we get FTTP. One advantage of larger companies like Verizon is that they have enough capital to do these big projects, which smaller phone companies, like ours, can't match.

Re:Why is this assumed to be bad???

[spacefrog]

I've had Fairpoint in the past, and I feel sorry for these people. Where I used to live, here is what they charge [fairpoint.com]. These people may not get it as bad, but Fairpoint and Value do not go together. $69 for 1.5/512. OUCH.

Re:Satellite

[drinkypoo]

Satellite is crap. The VSAT people give you like 3GB/mo. That's fucking worthless, I can't even use it for business two days a week with a three gigabyte cap. Skyblue has no capacity out here and hughes wants like $110/mo for their lowest level of service now, and I've heard from numerous people who have gotten capped on their service as well. Like it or not the satellites simply cannot handle a useful amount of traffic. It would be far more effective to just put up a bunch of autonomous wifi repeater blimps than to fuck around with all these satellites.

Re:what will happen to the consumers

[Anonymous Coward]

You might be suprised. Some rural areas could end up getting fiber. I did firmware development on one of the products Verizon is using to roll out its FiOS service. At the time, sales was telling us engineers that there was actually a lot of interest coming from the smaller providers in rural areas. Why? Because of the line lengths.

In rural areas where the population is really spread out, it doesn't make sense to have everyone connected directly to a central office. You can only run copper so far. So what they do is set up a series of remote terminals and run T1s or sometimes an OC3 between them. If you live in the middle of nowhere, you might go through 7 or 8 remote terminals before you hit a central office. Typically, the remote terminals can't be more than a few kilometers apart. Having all that equipment spread out is expensive to maintain. When something isn't working, someone has to get in a truck and drive to the remote terminal to figure out whats going on, replace a card, etc. Plus, they have to maintain power at all those remote terminals.

By going to fiber, they can eliminate all those remote terminals. The BPON and GPON specs allow you to go 20km without a repeater. That means all that powered equipment at the remote terminals that's prone to failure can get replaced with passive optical splitters. At the same time, they can offer cable TV and high speed internet service to areas that never had it before and increase revenue.

Also, the company I worked for that is selling all that equipment to Verizon built their BPON solution on the same platform that was used for remote terminals. Basically, any network that has that remote terminal equipment already installed can plug in a BPON card into any remote terminal and offer fiber service out of it. That allows the rural service providers to slowly upgrate their network with minimal investment.

Obviously fiber service isn't going to be offered everywhere, but you might be suprised at some of the locations where it starts showing up.

Re:It's all highly ironic

[MollyB]

I live in Marshfield, VT, and I have been well-served by FairPoint for years. I've had a DSL connection for over a year, and the speed keeps increasing at no extra costs.

The few times decades ago I was serviced by NYNEX (now Verizon) and it sucked. You'll be much better off with FairPoint, in my experience.

Goodbye Service!

[buka1337]

For those who know nothing about FairPoint Communications. Their strategy is to buy up markets that no one else wants to serve and operate them for as cheaply as possible. Quality of Service will not go up...it will go down in a huge way. I work in one of their tech support call centers. We used to be their exclusive tech support for all of their subscribers, however their service was so bad it was costing us money since we have a standard monthly billing, we ended up telling to them to take a hike. One market had about 60% of their subscribers calling in every month. Every time it rained everyone lost sync on their modem. That properties' tech support has been outsourced overseas. The worst Fairpoint property my company still handles has 976 subs. We plan for 390 of those calling in each month. Our overall average for Fairpoint companies is about 25% of their customers calling in for internet support each month.